crazyhorse

While I agree for the most part with your post, Rob, I don't think there will always be something faster. Eventually this horsepower war will come to an end. Look at the rising fuel cost and environmental demands and rising insurance cost. Someday, I think, these cars will become dinosaurs.

Enjoy the war while it lasts.

mr-mstng

Good point Kevin. Thinking about it now, you're right, I don't think we can expect to see much (if anything) beyond this in terms of HP, but maybe a regular model will come out that has an equal amount of power. I think Detroit will build it as long as consumers ask for it. If gas goes over $3.00 a gal for most of the US, and stays there, then attitudes might change, but until then we'll have our fun until daddy takes the T-Bird away!

Dan

So much for a simple question.

My take on it is this:

When dealerships stop allowing negotiation, or at least drastically limit negotiation from what we have today....... Negotiating is FAIR GAME.

I agree with Kevin, we should not really be making judgement on what dealer's should make. There are a lot of work where the seller makes 100% profit and we don't get upset.

However, if I walk into a dealer and he chooses to negotiate, as a smart consumer I'm going to get the best possible price.

IMO, it shouldn't be up to the customer to ensure the dealer is making enough money. If I'm asking for something unreasonable, DON'T SELL ME THE CAR!

If I ask for 1% above dealer invoice and I get it and the salesman makes no money on the sale, how exactly am I to blame??

If dealers aren't making enough money, they need to fix the problem internally, within the auto industry (ie. agree to stick to within 5% of MSRP or something).

Now, someone please answer George's question.

Dan

hosspony

Now, someone please answer George's question.

Dan
[/quote]


Dan, I can't answer the question. However, I do know that car purchases are very much an emotional decision as much as a financial decision. I was simply trying to state some simple economic facts as to why dealers (and business in general) behave the way they do. My simple response is I think initially these cars will be priced at a premium, in time the prices will fall into line +/- MSRP. And I for one think it is very fair for this level of performance.

Dan

Dan, I can't answer the question. However, I do know that car purchases are very much an emotional decision as much as a financial decision. I was simply trying to state some simple economic facts as to why dealers (and business in general) behave the way they do. My simple response is I think initially these cars will be priced at a premium, in time the prices will fall into line +/- MSRP. And I for one think it is very fair for this level of performance.
[/quote]

John, I wasn't at all refering to any post in particular...... just talking in general.

I too think the GT500 will definately fetch MSRP.

I was just commenting on the negotiation process of dealerships for any given car.

OBleedingMe

Hosspony, I really don't see how your post relates to mine. I'm just talking about getting a fair deal, not inflation economics.

For instance, if milk was sold for an average of $2.00 a gallon and a store was selling it for $6.00 a gallon, I would not shop there. If the milk was an average of $0.20 a gallon and the same store was charging $0.60, then I STILL would not shop there. The same common sense should be applied to any other business that sells a product for prices well beyond its fair market value. It doesn't matter if the minmum wage is $10, $5, or $0.50 - you can still price gouge in ANY one of these various stages of inflation. Simple as that.

What I was trying to make clear in my post was that ALL businesses will make as much money as possible off of you if you let them (see my ATM example). The general public is ultimately in control of how much gouging we take, and I think our culture has almost forgotten that WE are the ones truly in control of price flexibility.

danazar

I worked at a Ford dealership (very briefly). There are two factors in play here:

1) Supply and demand. The reason that you can walk into a Ford dealer and haggle on the price of a new Taurus is that you can walk into any Ford dealership and get a Taurus and if they'll make even $1 they'll be happy to move it off the lot, since they have other ways of making money from the sale (for example: it boosts their total sales figures which helps not only their status as a volume dealer but also serves a requirement for things like Blue Oval Certification and SVT sales licensing, as well as clearing the car off the lot quicker which is good since they only get a grace period of about two months from Ford before they have to start paying the car off to the dealer themselves, and any kind of customer-satisfied sale is good for business since it will generate referrals and probably a repeat purchase, possibly on a high-profit model next time). If it's something that isn't rare and isn't in demand, then you can just feel free to walk out if you don't like the deal you're getting.

It does not work that way at all with the premium products or SVT models. Besides these models typically having no rebates or incentives, dealers will demand MSRP--or even mark up on it beyond that--because these vehicles come in more limited quantities. If they sell the two Cobras they have on the lot, they might have to wait a while to get two more--a couple months. If they're going to have to wait a couple months for their next Cobra delivery anyway, they may as well keep it on the lot until they find someone that'll pay full price for it--and inevitably someone will. There are rare instances where an SVT model's price will drop significantly below retail, but this is only when a new model which eclipses it in performance is on the horizon (e.g. the '04 Cobra dropping in price once the '05 GT proved to be such a capable car and people realized the SVT version of it would run laps around the '04.)

2) SVT sales licensing. As I mentioned, only certain dealerships get to sell SVT models--this further impacts price because it makes it a lot harder for you to say "I'm just gonna drive down the street and get one from Interstate Ford instead of you." The next SVT dealership with one in stock might be 30 or 50 or 100 miles away--and they're gonna have just as many local people interested in their SVT models as your local dealer does in his.

Not only that, but the whole structure of sales within a Ford dealership works differently. Not all salesmen at an SVT Ford dealer can sell SVT vehicles--to sell SVT models, you have to have worked there for at least two years, pass a Ford certification process, and your dealer may require you to meet minimum monthly requirements before it'll "upgrade" you to that status.

In essence, Ford is insisting on maintaining SVT as a premium label. This is evidenced further by their axeing of the SVT Focus--it was a great car, and the new '05 ST isn't a "bad" car either, but it's the kind of car that demand isn't so great for such that they might want to offer incentives on it, and offering an incentive on any SVT model hurts the whole SVT line.

This, IMO, is the main motivation behind killing the SVT Focus--near the end, sales started to lag a little, they started offering a secondary certification to non-SVT dealerships to sell the SVT Focus, and they were even dabbling with rebates on it, and if they continued all those things, they would've tainted the whole SVT name with them. With the "plain old" ST model now receiving rebates, it's a lot harder to point at it and say "If that one's getting incentives, why not on this Cobra?" than it would be if it still had an SVT badge.

In short... The entire system is being set up so that you'll pay full MSRP on an SVT vehicle. Ford is doing everything they can to ensure that, not only by boosting quality on their SVT vehicles, but by rigging the rest of the process to keep the SVT name and number of vehicles coming from it limited and premium enough to keep commanding those higher prices.

And lastly, the way Ford dealers manage to sell you a Taurus for $1 over their cost is that they know that if you refer someone their way or come back yourself and it generates an SVT or other premium sale, they're gonna make their profit there. That's the way the system is set up for them, to generate volume with low profit margin sales to draw enough people back for the high-margin sales. If they didn't have somewhere to make a profit, they wouldn't let you haggle on the Taurus. So don't let the fact that you can haggle on the Taurus make you think that you can haggle on the Cobra.

It doesn't matter what the dealer price on this car is. You'll be lucky to get one at MSRP at all, let alone with the options you want and the color you want and...

OBleedingMe

AH, what a tangled web we weave. That's for the very informative post, danazar! I love capitalism.

mr-mstng

Then there will be a BMW M3 in my garage next instead of a Ford. Also instead of telling my friends and neighbors to buy that 500 or that Escape, or that F-150, I'll mention that Toyota has some pretty nice offerings, or that GM has some pretty big rebates on their 1500s.

SVT and Mustangs will not keep Ford afloat. They need to sell a lot of other vehicles. If Ford and the dealers get too greedy, well then it will no longer attract customers. Ford and the Dealers hope that by you looking at a GT500, your significant other will wander over and look at that new Escape, or that new Freestyle, and buy one.

How Ford and Dealers act now is very important, because 5 years from now, when Toyota overtakes Ford in sales, every vehicle they sell will be important, and chasing away customers now will not bode well in the future. Detroit still needs learn that when they lose a customer to foreign competition, the chances of having them come back are minimal.

EDIT: I stand corrected, Toyota has already overtaken Ford in sales.

http://www.detnews.com/2005/autosinsider/0...utos-100759.htm

05fordgt

Jester, I just wanted to let you know that the Blue Oval money went away yesterday. It is NO MORE. The extra % a dealer makes for being certified is no longer there. I work at a dealership and this is a fact. For this car, most will be lucky to find one at MSRP. If the Mustang GT pricing is any indication, the Shelby will be marked way up. I understand the whole want to negotiate a price on a car, but for this vehicle, I don't believe it will be a possiblity. The only thing you may be able to negotiate will be how much of the mark up will they knock off. I just hope dealers won't be greedy on this car ( I won't hold my breath).

danazar

Then there will be a BMW M3 in my garage next instead of a Ford. Also instead of telling my friends and neighbors to buy that 500 or that Escape, or that F-150, I'll mention that Toyota has some pretty nice offerings, or that GM has some pretty big rebates on their 1500s.[/b][/quote]

This seems somewhat blind... you're ranting about Detroit being ignorant to the superiority of foreign automakers, and then you say you're going to recommend GM to your friends. Don't you see the problem there? Really, what you're talking about is "punishing" Ford for not making the GT500 cheaper--while at the same time you're trying to say that their problem is that their vehicles are the inferior kind that go for cheap, and they need to make better cars (that, due to that, will not go so cheaply).

Honestly, instead of actually trying to say that Ford should make cars that are more in demand, it sounds to me like you're whining about those cars being in demand, because of the fact that it means you won't be able to get 'em cheap anymore!

mr-mstng

Thanks for the info Jeff.

mr-mstng

First of all I'm not whining about anything. What I'm stating is that Ford and the Ford Dealers need to understand that you have to consistent in treating your customers fair. Saying MSRP is $X and then adding $x amount on top of the GT500 is just silly. People here have used appliances as an example in the past. Here's one: Fridigare advertises a new fridge that has internet access on the front door. Wow, you say to yourself, I have to have one, and its only $800! So you go to Home Depot, and they have 2. Great, you say, I'll take one. Whoa says the salesman, its a limited model. We have a 'market adjustment' on that of $500. The price is $1,300!!! Wouldn't you feel misled? Angry? Would you still buy it? I wouldn't.

I just think its silly and pointless to have an MSRP if no one follows it. What is the point of an MSRP then???? Have a fair price clearly stated, with minimal negotiation. If its $60K, then say its $60K. The same goes for rebates. They're silly. Price the car accordingly, and you won't need them. Continued rebates make the manufacturers look desperate to sell vehicles.

crazyhorse

I'm not disagreeing with your principle and I won't pay AMV myself. I'll wait if I have to, but, MSRP is manufacturers SUGESSTED retail price. The term in and of itself implies price flexibility.

1 COBRA

Perhaps Ford and some of its dealers will take a hint and take some responsibilty for the downfall of the T-Bird sales. There would have been so many more sales had they been fair rather than greedy, specially to those loyal Ford buyers. Now I can fully understand why we need more competition on the muscle car segment.

danazar

This is exactly why, as I said, Ford is trying to build up the SVT line to a no-rebates-offered-ever premium. And it's not like the American manufacturers are alone in this; Honda's pretty much the last holdout in terms of offering rebates, and even they are considering doing so in the near future to remain competitive.

You shouldn't blame Ford for this, as I said, and then steer people to GM. Or are you too naive to think that nobody in Chevy-land is looking at marking up the new Z06?

And as long as there's any room to negotiate on the price, you're gonna see that blade cut both ways. While low-demand, high-volume sales will see rebates and steep drops below MSRP, you'll get the opposite with high demand and low volume models.

I agree with you. It should be easy to get a car at the MSRP. But the manufacturers have no control over that. Once it shows up on the dealer's lot, it's up to the dealer; Ford can't force its dealers to sell the cars at any price. If you don't like it, don't blame Ford; go find a dealer that'll sell to you at MSRP.

But in this case, with the Shelby, if the stated price is $40k, then that means Ford, the manufacturer, is getting profits based off of it selling at $40k. If it sells for $60k (absurd example), Ford doesn't see a single extra dollar of that. Similarly, if it sells for $30k, Ford doesn't lose any money, either. What Ford gets from the dealer is based on the MSRP and nothing more. What you pay is based on what the dealer negotiates.

If you want no-haggle pricing, may I suggest Scion?

mr-mstng

I do believe that there might be a small markup on the Z06, but the price is pretty high now. Oh sure, there may be a couple that go for $100K+ to people that have more money than they know what to do with, and simply must be the first on their block to have one. But the vast majority of enthusiasts will not be paying an astrnomical markup.

Ford (and every other auto manufacturer) can control the price. This happens everday with generic items that you find at Wal-Mart, Sears, or Toys-R-Us. Take for example, the Tickle-Me Elmo doll ( ) from a few years ago. Remember how hot that was around Christmas? My niece wanted one Real bad, and since she her parents couldn't find one, I set out to get one. I went to over a dozen stores and put my name on a list to get one. Well, within a week I got a call from one store saying they are in, but they only have 6 and waiting list of ~20, so I have come up quickly. So I did. I bought it for the Price that it normally sells for. No hassle. No markup. Why? Becasue I later read that the company making them had an agreement that reatil price is fixed, and the retailer cannot charge more. The reason: bad publicity.

The auto manufacturers can have an agreement that a max price can be assessed to the final customer. It makes sense too. Think about this. Remember when the GTO came out, and how dealers were asking $$ on top of sticker? GM said they would only make 18K of them. Well, the markup and ensuing bad press (and other styling factors as well) kept people away. The result: cars sitting on lots unsold, that later needed rebates to move them. Also, and more importantly to the manufacturer, they sold half of what they were expecting. If GM had an agreement in place to limit the price, then this may not have happened, resulting in happier buyers, and more of them, telling their neighbors and friends, and showing off their car to co-workers, etc.

It just seems to me that it makes more sense from a business standpoint, to limit the price and say its a first come, first serve basis. The same goes for items at any retail store, or concert tickets even. You want one? Get here early.

PACETTR

I do believe that there might be a small markup on the Z06, but the price is pretty high now. Oh sure, there may be a couple that go for $100K+ to people that have more money than they know what to do with, and simply must be the first on their block to have one. But the vast majority of enthusiasts will not be paying an astrnomical markup.

Ford (and every other auto manufacturer) can control the price. This happens everday with generic items that you find at Wal-Mart, Sears, or Toys-R-Us. Take for example, the Tickle-Me Elmo doll ( ) from a few years ago. Remember how hot that was around Christmas? My niece wanted one Real bad, and since she her parents couldn't find one, I set out to get one. I went to over a dozen stores and put my name on a list to get one. Well, within a week I got a call from one store saying they are in, but they only have 6 and waiting list of ~20, so I have come up quickly. So I did. I bought it for the Price that it normally sells for. No hassle. No markup. Why? Becasue I later read that the company making them had an agreement that reatil price is fixed, and the retailer cannot charge more. The reason: bad publicity.

The auto manufacturers can have an agreement that a max price can be assessed to the final customer. It makes sense too. Think about this. Remember when the GTO came out, and how dealers were asking $$ on top of sticker? GM said they would only make 18K of them. Well, the markup and ensuing bad press (and other styling factors as well) kept people away. The result: cars sitting on lots unsold, that later needed rebates to move them. Also, and more importantly to the manufacturer, they sold half of what they were expecting. If GM had an agreement in place to limit the price, then this may not have happened, resulting in happier buyers, and more of them, telling their neighbors and friends, and showing off their car to co-workers, etc.

It just seems to me that it makes more sense from a business standpoint, to limit the price and say its a first come, first serve basis. The same goes for items at any retail store, or concert tickets even. You want one? Get here early.
[/b][/quote]
How many Mustang GT's do you think are sitting on dealer lots, and how much rebate do you expect to see on them? GTO's didn't sit because of AMV, they sat because they S-U-C-K. Dealers also have ways around pricing agreements. I know of a dealer who had a pricing agreement on an unnamed high-demand vehicle. The dealer bought it, tagged it, and sold it USED for a much higher profit than their agreement would allow. See supply and demand
And when you go down the street to pick up that new M3, don't be too disappointed when you find AMV at the BMW dealer as well. I guess there's always that new GTO at the Chevy dealer

1 BULLITT:

FWIW, you are pretty close, except that as danazar said, there is no more Blue Oval money. And none of this matters because these cars will bring stupid money. A fair deal will be whatever the dealer and the customer agree to...

OBleedingMe

Your Tickle Me Elmo story reminds me of when the N64 systems were red hot around Christmas. There was a young couple who went around buying 40 or 50 of these things real early on. Then when the stores ran out in mid-December, they started auctioning off their N64s!! They made tons of money. Their last one (then worth $200, now worth $30, lol) went for over $2000!!!!! The things some people will do to satisfy their spawn.

But anyway, I sort of disagree with price fixing. It's good for the consumer when you have a higher demand, but it's bad when you have a lower demand, because you're still selling it for the same price. Besides, do you really think you'll be able to enforce that "first-come-first-serve" theory? I don't think so. One word: MONEY. Money talks, people walk. Let me explain. Check out this scenario:


A wealthy man in a three-piece suit waltzes into a dealership with a briefcase and asks to speak to the owner of the dealership. When the sales manager asks what he wants to speak to the owner about, the man opens his briefcase discreetly. The sales manager's eyes get as wide as saucers, and he runs to get the owner.

The owner rushes out of his plush office, greeting the man in the suit. He ushers him into his office, even has his secretary take off the man's suit jacket. He offers the man coffee, but he politely refuses.

"So, what can we do for you, sir?" says the owner.

The man clears his throat. "I want to be the first person in this state to own a new Shelby GT500. I am well aware that the order banks opened months ago and that they are going to start producing these cars within the week."

The owners faces turns a little sour. "Well, we have around twenty pre-orders already in the system."

The man says nothing. He simply puts the briefcase in his lap and opens it.

The owner's face goes pale. "H.. how much money is that?"

The man smiles. "One hundred thousand dollars. That's for the car. I'll pay you personally an additional 'finder's fee' for 'finding' me that first Shelby at your dealership. Any options/paint color I don't like on the car I will simply have you change here at the dealership. All paid for by me, of course."

"And um..." The owner wets his thick, fat lips. His forehead was greasy with anticipation. "And how much would my personal fee be?"

"Twenty grand, however you like. Only payable, of course, if you come through on your end and complete any changes to the car I want flawlessly and in a timely manner."

The owner thrusts his pudgy hand across his mahogany desk. "My friend, you have yourself a deal."

They shake hands. The owner's hand is warm and unpleasantly moist.

"One more thing," the man in the suit says. He takes out a bundle of bills from his briefcase and tosses it to the owner. "That's ten thousand dollars. That's my deposit. Have your sales manager write me up a receipt for it before I leave."

"Sure, no problem!"

The two men get up and leave the office, talking while the sales manager types up a receipt. They all shake hands before the man in the suit leaves.


I'm sure stuff like this happens at major dealerships every now and then. Not in the flourish I described it, but I'm sure it happens in one form or another. It's the nature of our free market. Yeah, the owner is going to screw someone out of their car, but like I said (and this is my point) - money talks.

We live in a free society with a free market. This gives us the power to negotiate, whether it's for haggling a dealer down to a price we can afford or getting something we think is worth a premium. I don't think I would want to give up my negotiating power in exchange for price fixing by large corporations who will force us to pay what they think we should pay. In a capitalistic society, market competition and negotiating power are your friend!

mr-mstng

There won't be rebates on Mustangs for the foreseeable future. If gas spikes to over $3.50/gallon, then you'll be able to get a GT anywhere. Heck, I may get rid of the truck if it goes that high.

GTOs sat for two reasons, the AMV and the styling. The styling wasn't the greatest, but enthusaists would still buy them. The AMV made a bad situation worse. Very few people are going to pay over sticker for a USED car, so I think that is a poor example. The car market is very unusual. In the late 80s, early 90s collector cars spiked, and then in the mid 90s, they took a nosedive. I think its beginning to look that way again. The enthusiasts are getting priced out of the market, and when that happens, demand dries up, and prices fall back. Its kinda like the stock market, when prices go up, people start jumping on the bandwagon and buying. But at some point people step back and realize they're paying a lot for something that may not be worth that amount. (i.e Dot Com boom)

BMWs are below sticker. I checked this weekend. Besides why do you care what I buy?

Charlie,

I see you point about the free market, but the market works one way for a certain industry, and another for another industry. It defies logic. Why do people accept one way of doing business for a N64 or a $10K plasma TV for that matter, and another for a vehicle?